Trump calls a key part of the Republican tax plan 'too complicated'

How President-elect Donald Trump might actually execute his policy promises is starting to come into focus.

And one thing that’s clear is the typical complications lawmakers and citizens alike have come to expect from major pieces of legislation don’t seem likely to be acceptable to Trump.

In an interview with The Wall Street Journal, Trump spoke out against one of the most contentious parts of the House Republican plan to overhaul the US tax code.

According to the Journal’s report published Monday night, Trump called the border adjustment element of the House Republican plan “too complicated,” adding that, “Anytime I hear border adjustment, I don’t love it. Because usually it means we’re going to get adjusted into a bad deal. That’s what happens.”

On Tuesday, however, AshLee Strong, national press secretary for House Speaker Paul Ryan, said, “We’re very confident we’ll get it done,” according to Politico’s Rachel Bade.

As currently constructed, the House Republican plan would incentivize US companies to locate production in the US as it would tax goods based on where they are sold, not created. This would happen via a border adjustment tax which taxes imports and allows exports to be exempt.

But the most significant part of Trump decrying the currently-proposed border adjustment as “too complicated” is that it provides a window into how Trump is likely, at least in the early days of his administration, to try and get policy executed.

Make no mistake, border adjustment taxes are fairly complicated. How are multinational companies with operations inside the US to be treated? Think about a car, constructed and sold in the US, but built with many parts sourced from overseas. How are taxes applied there and at what stage in the process?

The current tax code allows companies to build goods in low-tax countries and then import those goods to the US, creating incentives for things like tax inversions among other maneuvers. This chart from Goldman Sachs shows how US corporate profits have increasingly been parked outside the US over the last several decades.


By Myles Udland.
Full story at Yahoo News.